September 3 , 2012:

COLOMBO - Sri Lanka has shut its sole 50,000 barrels-per-day oil refinery for a few days after damage to a floating pipeline at the Colombo port, an official said on Monday. The shutdown is unlikely to have a large impact on the Asian diesel market as Sri Lanka's gasoil demand is lower than usual at the moment due to the monsoon season, traders said. The island nation's petroleum ministry said the Sapugaskanda refinery on the outskirts of the capital was shut on Saturday after the damage on Aug. 31, which compelled a ship carrying 135,000 tonnes of crude oil to wait at the port. The shutdown has prompted state-run Ceylon Petroleum Corp (Ceypetco) to seek additional oil products to manage the supply shortfall. "Engineers have been working since Friday to repair the damaged pipeline and are waiting for spares from abroad," petroleum ministry spokesman W.P.M. Pradeep Roshen told Reuters. "It will take a few days to repair," he said in reply to a question on when the refinery would resume operation.

Ceypetco is seeking 300,000 barrels of gasoil and 40,000 tonnes, or about 260,000 barrels, of high sulphur fuel oil for mid-September delivery, to make up a possible shortfall amid the temporary closure of the decades-old refinery. Ceypetco on Aug. 22 awarded a tender to buy 40,000 tonnes of fuel oil to a little known company called Bumi Siak Pusako after removing oil trader Vitol SA from its supplier list over fuel quality concerns.  The company restarted its Sapugaskanda refinery on Aug. 10 after having closed it for maintenance on July 2, which prompted its purchase of nearly 2 million barrels of oil products, about double its usual monthly import volumes.

By Reuters

Septempber 3, 2012:

SAN ANTONIO - Valero Refining Company-Aruba N.V., a subsidiary of Valero Energy Corporation (NYSE: VLO), today notified employees of the Valero Aruba Refinery that Valero has decided to further reduce operations and reorganize the site as a refined products terminal. "We believe that Aruba has the assets to compete as a world-scale crude and refined products terminal," said Valero Chairman and CEO Bill Klesse. "With both deepwater berths and smaller berths, the terminal will have the flexibility to load the very largest crude ships. In addition, the scale and mixture of tankage will permit commercially attractive storage opportunities for our customers. Aruba's proximity to growing markets and its business-friendly political environment make it an ideal location for our new terminal operations."  Terminalling activities will, however, require a considerably smaller workforce. The reorganization and reduction in workforce is expected to be complete before the end of 2012. Valero will continue to supply jet fuel, gasoline, diesel, and fuel oil to the island, as well as engage in third-party terminal services. In this terminal operations mode, Valero will continue to be a significant employer in Aruba, and will continue to invest in Aruba with facility improvements and dock and tankage upgrades. alero human resources representatives will begin meeting with refinery employees this week to explain the staffing selection for the terminal operations. A fair and reasonable arrangement will be presented to those employees not selected to be a part of the terminal operations. Valero will provide resources to assist in their transition to other employment.

Valero suspended refining operations at the plant in March and has maintained the refinery in a state that would allow a restart. Valero has also kept its employees on the payroll pending this decision. In the near term, the refinery will continue to be maintained in a state that would allow a restart should Valero be successful in the pursuit of alternatives for the refinery prior to the transition to terminal operations. "We will continue to work with Prime Minister Eman and his government in this effort," Klesse said. "Our discussions with interested parties, including those facilitated by the Government of Aruba, will continue, and if successful may result in the suspension of the workforce reduction. We greatly appreciate the continued efforts and support from the Prime Minister and his government."

About Valero:

Valero Energy Corporation, through its subsidiaries, is an international manufacturer and marketer of transportation fuels, other petrochemical products and power. Valero subsidiaries employ approximately 22,000 people, and assets include 16 petroleum refineries with a combined throughput capacity of approximately 3 million barrels per day, 10 ethanol plants with a combined production capacity of 1.2 billion gallons per year, and a 50-megawatt wind farm. Approximately 6,800 retail and branded wholesale outlets carry the Valero, Diamond Shamrock, Shamrock and Beacon brands in the United States and the Caribbean; Ultramar in Canada; and Texaco in the United Kingdom and Ireland. Valero is a Fortune 500 company based in San Antonio. Please visit www.valero.com for more information.

Safe-Harbor Statement:

Statements contained in this release that state the company's or management's expectations or predictions of the future are forward-looking statements intended to be covered by the safe harbor provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. The words "believe," "expect," "should," "estimates," and other similar expressions identify forward-looking statements. It is important to note that actual results could differ materially from those projected in such forward-looking statements. For more information concerning factors that could cause actual results to differ from those expressed or forecasted, see Valero's annual reports on Form 10-K and quarterly reports on Form 10-Q, filed with the Securities and Exchange Commission and on Valero's website at www.valero.com.

CONTACTS:

Bill Day (Media)

(210) 345-2928

Ashley Smith (Investor Relations)

(210) 345-2744

By Reuters

September 3, 2012:

HOUSTON--Oil and gas producers in the U.S. Gulf of Mexico began ramping up significant amounts of oil and gas production after the passage of Hurricane Isaac, the U.S. Bureau of Safety and Environmental Enforcement said Sunday. Some 72% of the oil production in the Gulf's federal waters, or 986,698 barrels a day, remained off-line, down from about 94% Saturday. About 56% of the region's natural-gas output was shut in, or 2.5 billion cubic feet a day, down from 65% Saturday. Refiners were also rapidly bringing up refining capacity that had been idled as a precaution during the storm. As of Sunday afternoon, 439,500 barrels a day of refining capacity were off-line in the Gulf Coast, according to the U.S. Department of Energy. At the peak of the storm, about 1.3 million barrels a day of refining capacity had been shut.

On Sunday, only two refineries remained shut down--Phillips 66's Alliance refinery and the facility owned by Chalmette Refining, a joint venture between Exxon Mobil Corp. and Petroleos de Venezuela S.A., according to DOE.

By Down Jones News Wire

September 3, 2012:

European and Korean companies have bid for a project to double the capacity of an oil lubricants refinery in Yanbu controlled by state oil giant Saudi Aramco, industry sources said on Monday. South Korea's Samsung Engineering and Hyundai Engineering and Construction, Italy's Saipem and Spain's Tecnicas Reunidas bid on Sept. 1 for the project, which is being developed by the Saudi Aramco Lubricating Oil Refining Co (Luberef). The firm, 70 percent-owned by Saudi Aramco and 30 percent by Saudi Jadwa Industrial Investment, produces around 550,000 tonnes per year (tpy) of oil lubricants at its two refineries on the kingdom's Red Sea coast at Jeddah and Yanbu. The capacity of the Yanbu refinery will double once the project is completed in 2015. It now has a capacity of 280,000 tpy of oil lubricants, and the expansion will produce other types of base oil, new to the Gulf region, Luberef has said. An executive at the firm said in 2010 the cost of the project was expected to be around $1 billion.

By Reuters

September 3, 2012:

Venezuela's government has not ruled out any theory in the investigation into the Aug. 25 explosion at the Amuay refinery that killed 42 people, but "there's no way" that the proper maintenance was neglected, Energy and Mines Minister Rafael Ramirez said Sunday. "We cannot rule out any hypothesis. We're working on the basis that we need to clarify ... the origin of this situation," Ramirez said in an interview with journalist and former Vice President Jose Vicente Rangel on the private Televen channel. "However, there are things that can be ruled out," the minister said. Among those is the version given by several residents in the area affected by the blast, which local media played up, about an alleged gas leak over several days prior to the explosion, Ramirez said.

"That is a complete lie. It's not possible for this to occur with all the detection mechanisms we have at the refinery," Ramirez, who is also CEO of state-owned Petroleos de Venezuela, or PDVSA, said. Regarding the hypothesis that the blast occurred due to negligence, Ramirez said that "there's no way that we could (not perform) the maintenance at installations as complex as this." Between 2007 and 2012, PDVSA invested $6 billion in the maintenance of its refineries and, just in July of this year, $4.3 billion was poured into the Paraguana Refinery Center, or CRP, in the northwestern part of the country where Amuay is located, the minister said. "We don't want to avoid any responsibility but, without a doubt, we can't be naive and here we have to investigate everything," the minister said in response to a question from Rangel about possible sabotage. The petroleum industry "is subject to threats and has been attacked on an ongoing basis," Ramirez said, referring to the fact that the sector was shut down from December 2002 to January 2003. "It has become a target for the enemies ... of the country, a war objective," Ramirez said.

The Amuay refinery, one of the three in the Paraguana Refinery Complex, was rocked by an explosion on Saturday, Aug. 25, that killed 42 people and injured 132. The blast damaged 500 nearby buildings and started a fire that burned for four days and affected nine fuel tanks at the facility. Eighteen National Guard members died in the accident at the complex, which has a base and housing for guardsmen.

By Fox News